The planned $88 million 8036 Metcalf Avenue mixed-use development in downtown Overland Park could get a boost from some public tax incentives.
Hunt Midwest, the project’s developer, has requested a Tax Increment Financing district, an overlapping special 1% sales tax covering one parcel and a sales tax exemption on construction materials through Economic Development Revenue Bonds.
From the two districts, if ultimately formed, Hunt Midwest could see as much as $15.8 million in reimbursement, plus an additional $3.3 million in savings on construction materials from the sales tax exemption.
On Wednesday, the Overland Park City Council Finance, Administration, and Economic Development Committee unanimously recommended tentatively moving forward with incentives for the mixed-use project.
That action is the first step that will eventually lead to a full city council decision on whether to grant the full range of requested incentives, but it does not guarantee that any such incentives will be authorized.
What’s planned at 8036 Metcalf?
- The new construction for the 8036 Metcalf project will include a six-story vertical mixed-use building, with ground-level retail and upper-level housing.
- In all, about 225 apartments and 5,000 square feet of retail space are planned.
- Below the building, there will be both public and private parking.
- Hunt Midwest also did The Vue mixed-use development nearby.
8036 Metcalf requesting TIF, CID incentives
TIF districts work by turning over tax revenues earned from increased property value — called increments — to a third party to cover or reimburse costs incurred in the development of a specific project or wider area.
The TIF district in this case would cover the old Winstead’s property as well as the neighboring UMB Bank/Atomic Cowboy building.
If allowed to form, the district would be considered a redevelopment area because it would contain a building that is at least 65 years old (the bank building) and a vacant property.
The TIF could offer $15.5 million in estimated reimbursement to the developer over 20 years.
Community Improvement Districts, or CIDs, are special, limited sales taxes that also use revenues raised through a temporary, special sales tax assessed within set boundaries.
The CID for 8036 Metcalf would just cover the new construction and would not include the existing UMB Bank building. It would be a 1% special sales tax.
The CID is expected to bring about $375,000 in estimated reimbursement to the developer of 20 years.
Curt Petersen, an attorney from Polsinelli representing Hunt Midwest, said the incentives would help offset the cost of constructing below-ground parking underneath the new building.
Housing attainability, sustainability, parking are hold-ups
The committee supported moving forward with the application for incentives for now, though there were a few sticking points.
“My intention is to vote to move this conversation forward tonight with direction to you and the staff to work through these details,” said Councilmember Melissa Cheatham.
For one thing, the majority of the committee wanted to see housing attainability addressed in the development. Petersen said there are currently no plans to offer a percentage of units for affordable housing or do other carveouts. However, that is something the city has required on other mixed-use projects receiving incentives and has prioritized in its drafted but yet-to-be adopted incentive policy updates.
Additionally, the committee wanted a concrete promise for a sustainable building. The developer intends to design to the Green Globes standard from the Green Building Initiative but fell short of promising they would get the certification credential.
City leaders also discussed what to do about parking for future residents — and whether it’s the city’s business to dictate how Hunt Midwest would handle parking for its tenants — but there was no consensus on what the committee wanted to see on that issue.
Next steps on incentives:
- Before anything else happens, the city council will need to schedule a public hearing, likely in March, related to establishing a redevelopment TIF district.
- Later, the finance committee and the city council will mull a TIF project plan, a completed CID petition and a redevelopment agreement, which will be negotiated by city staff.
- Construction on the 8036 Metcalf project is expected to begin in 2027 at the earliest.
Keep reading: Overland Park clears plan for apartments on Metcalf site where Winstead’s once stood
